Good morning.
Are CFOs effective interim CEOs? It may depend on how strategic they are. One particular example in the spotlight right now is at the British energy giant BP.
Last week, BP named Murray Auchincloss, the company’s CFO since July 2020, interim CEO. Today, BP announced that Kate Thomson will take on the role as interim CFO. Thomson is the first woman in that role at the company. She’s currently BP’s VP of finance for production and operations. Thomson has worked at BP for 19 years, previously holding several senior financial roles, including group treasurer and head of group tax.
“Kate’s experience and skills make her ideally suited to take on the role of interim CFO. She brings deep technical knowledge together with a detailed understanding of BP,” Auchincloss said in the announcement.
Additional major oil and gas companies where women are finance chiefs include Exxon Mobil SVP and CFO Kathryn A. Mikells, since 2021, and Shell plc CFO Sinead Gorman, since 2022.
BP’s C-suite shakeup follows the announcement on Sept. 12 that CEO Bernard Looney resigned from the company. An investigation found Looney had personal relationships with colleagues prior to becoming CEO in February 2020, according to the company. Looney admitted that he wasn’t transparent about the relationships. However, BP said that “no breach of the company’s code of conduct was found.” Looney joined BP in 1991 as a drilling engineer and spent his career at the company. A decision hasn’t been made yet regarding payments to his compensation, according to BP.
Auchincloss, now interim CEO, a native of Canada, began his career as a financial analyst at Amoco. He started working at BP in 1998 after the two organizations merged. He’s had several financial leadership roles during his tenure.
CFOs as interim CEOs
The “strategic CFO” can be an “excellent fiduciary as an interim,” says Shawn Cole, executive recruiter and president of Cowen Partners, an executive search firm specializing in the C-suite. “But it really depends on the CFO, how they are viewed by the board, and if they’ve earned the title ‘strategic business partner.’ Many companies still perceive their CFO as ‘chief accountant,’ in which case they may not be considered as interim.”
“Some industries have seen a CFO step into the role of interim CEO, however, upon completion of the term, stepped back into the role of CFO,” says Alyse Bodine, global managing partner of the Financial Officers Practice, Heidrick & Struggles. Some roles the firm sees being sought after for interim CEO include chief strategy officer, COO, and chief commercial officer, Bodine says.
I contacted BP and a representative confirmed the company is conducting an external search for a permanent CEO. The representative also said BP doesn’t have a timeframe in which they’ll appoint a new chief executive. That means Auchincloss may be at the helm of the company’s strategic initiative for some time.
Looney had plans for a net zero energy transition by 2050. BP aims to cut emissions from the carbon in its oil and gas production by 20%-30% by 2030. (That’s a downgrade from an earlier target of 35%-40%.) The company also had plans for an increased investment in oil and gas projects up to $8 billion by 2030.
Auchincloss told staff in a town hall meeting that the company’s goals were unchanged, Reuters reported. “Our strategy hasn’t changed. And our focus remains on performance—quarter by quarter,” he said.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Tom Vadaketh, EVP and CFO at Bausch Health Companies Inc. (NYSE/TSX:BHC) resigned from his role to pursue another opportunity, effective Oct. 13. The company has initiated a formal search process to identify Vadaketh's permanent replacement. If a successor isn't in place before Vadaketh's departure, the company intends to appoint John S. Barresi, who is currently serving as the SVP, controller and chief accounting officer, to the role of interim CFO. Barresi has more than 15 years of experience as a corporate finance executive.
Stephen D. Yarad was named CFO and treasurer at AlTi Global, Inc. (Nasdaq ALTI), a global wealth and asset manager, effective immediately. Yarad joins AlTi from MFA Financial, Inc., where he served as CFO and treasurer. Before joining MFA, he was an audit partner in the New York financial services practice of KPMG LLP. Yarad began his career with KPMG in Australia in 1991.
Big deal
C-Suite Global AI Indicator Report: AI Is the Ultimate Level-Up, a new report by Workday (a CFO Daily sponsor), finds that 98% of CEOs say there would be some immediate business benefit within their organization from implementing AI. However, 49% say their organization is unprepared to adopt the technologies. Meanwhile, 71% of business leaders believe that AI and machine learning (ML) will have an impact on the global business landscape in the next three years.
One of the key questions respondents were asked: What are the greatest risks to integrating AI and ML into your organization? A top risk is security and privacy (62%), followed by errors(61%), bias (56%), and lack of transparency (51%).
One solution for the lack of transparency behind AI algorithms, for example, is collaborating closely with peers across the organization (such as finance and HR). IT teams will be better placed to understand the needs of the business and replicate them within safe, fit-for-purpose AI solutions, according to the report. “We’ll deploy an alternative AI technology that will get teams to where they want to be, and we’ll tell you exactly how it came to the conclusion that it did,” Matt Peters, CTO at CAI, a U.S.-based technical professional services firm, told Workday.
The findings are based on a global survey of 2,355 C-suite executives.
Courtesy of Workday
Going deeper
By 2026, 80% of large enterprise finance teams will rely on internally managed and owned generative AI platforms trained with proprietary business data, according to a report by Gartner, Inc. "There are three distinct conversations that CFOs should have across leadership circles to ensure that reasonable expectations are established, and the use of generative AI creates value without introducing unacceptable risks," said Mark D. McDonald, senior director analyst at the Gartner Finance Practice.
Overheard
“It was around 1 a.m. and I picked up the phone to call him. [My colleague] said to me ‘Wait, you can’t call this guy in the middle of the night, he doesn’t make enough money.’ So I said: ‘Fine, how about this? I’ll call him, I’ll tell him we’re going to give him a raise, and then ask the question.’ So that’s what we did.”
—Peter Brown, CEO of investment management firm Renaissance Technologies, speaking on Goldman Sachs’s Exchanges podcast, recalled the time when he was working late with a colleague and they came across a problem neither of them could solve. So Brown dialed a subordinate’s number at one o’clock in the morning. He joined Renaissance Technologies two decades ago—being promoted to executive vice president in 2003 and named a co-CEO in 2010, and since then has set an unusual precedent for the company and stuck with it, Fortune reported.
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